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Company lays out refinery plans at oil shale meeting

GOLDEN ­— A company experimenting with oil shale is planning to begin production on private land in Utah in 2020, while two companies working on shale in Colorado are making slower progress.

Enefit American Oil, an Estonia-based company, is mining oil shale near Vernal, Utah, and preparing to produce 25,000 barrels a day of the equivalent of crude oil, the chief executive officer of the company said at the 2012 Oil Shale Symposium at the Colorado School of Mines.

Officials with Royal Dutch Shell and American Shale Oil LLC, said their work in heating the rock thousands of feet beneath the surface is proceeding as they approach the 2016 deadline for their leases on federal land in Rio Blanco County.

All three companies offered updates on their progress at the end of the three-day symposium.

Each company is proposing to heat oil shale to about 650 degrees Fahrenheit, the temperature at which kerogen, a petroleum-like substance, boils off the rock.

Enefit American Oil plans to capture the kerogen in an above-ground retort. Shell and AMSO are proposing to heat rock in place, far below the surface, and capture the vapors using conventional production wells.

Enefit is preparing for environmental studies needed to produce on its private land and is hoping to begin full production of 50,000 barrels a day in 2024, CEO Rikki Hrenko said.

The company has six full-time employees in its Vernal, Utah, office and is supporting several consulting jobs in the area. It anticipates of work force of about 2,000 at full production, Hrenko said. It also is looking to begin hiring for construction in 2017, Hrenko said.

AMSO, which is owned by Genie Energy based in New York City, is preparing, again, to drop a heater deep into the earth to begin its heating process. The first heater, which was inserted into a deep layer of oil shale less than a year ago, operated for a few days, but ultimately failed,

Len Switzer, vice president of engineering said, noting that his presentation had a “deja vu” quality compared to a similar one at the 2011 symposium.

“Our pilot has been delayed for about a year,” Switzer said.

The heater’s failure, however, led to new techniques for manufacturing and allowed the company to test and prove an insulating material that will protect the overburden from damage by the heated kerogen vapor escaping into the production wells, he said.

A new heater is to be delivered on Dec. 1 and the company hopes to restart its pilot project before the end of the year, Switzer said.

Shell’s East Research Demonstration and Development project is on schedule, Pat Janicek, project manager, told the symposium. Shell has three leases on federal land and they, as with that helped by AMSO, expire in 2016.

The companies then must decide whether to seek commercial leases, which would expand their 160-acre test plots.